Bechtel in Talks to Build Pipeline in Former Soviet Union

Kenneth Howe, Chronicle Staff Writer

Published 4:00 am, Wednesday, February 14, 1996

Bechtel Corp., the big San Francisco construction firm, yesterday confirmed it was holding discussions with officials in the former Soviet republic of Georgia about building an oil pipeline in a deal that may involve local oil giant Chevron Corp.

A spokesman for Bechtel said yesterday that a company delegation, headed by Charles Harper, Bechtel's senior executive for Eu

rope and Africa, was in the Georgian capital of Tbilisi.

The group was there to discuss building either a new pipeline or refurbishing the old one that runs almost 500 miles from the Caspian Sea to the Black Sea, passing through Azerbaijan and Georgia.

The project -- likely to cost hundreds of millions of dollars -- also could involve building a port facility at Poti, which is on Georgia's western coast along the Black Sea, and a refinery in the nearby town of Supsa.

Georgian ambassador to Azerbaijan, Giya Chanturiya, was quoted yesterday by Reuters as saying that a deal with Bechtel was expected within the next week or so. However, a spokesman for Bechtel in San Francisco declined to confirm whether a deal was imminent.

The purpose of the pipeline would be to transport oil from the landlocked Caspian Sea to international markets.

The oil-rich western Caspian, where San Francisco-based Chevron is negotiating for oil exploration rights, is thought to have several billion barrels of recoverable oil.

Chevron officials visited Georgia last month and held preliminary discussions with the government of Georgia and an international oil consortium about helping to finance a similar pipeline.

However, it was unclear whether Bechtel and Chevron were working on the same project since neither company would reveal in detail the nature of their discussions.

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In addition to transporting Caspian Sea crude, Chevron could use a new pipeline as a secondary route for oil coming from its vast Tengiz field in Kazakhstan.

"We are looking at multiple export options because the quantity of oil coming from the region is such that it would be too much for one route," said a Chevron spokesman.

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